'Statement of Intent

By

Productivity South Africa

And

University of the Western Cape

As to Joint Integrated Research on Decent work and Productivity

April 2020

1. INTRODUCTION

1. Productivity SA and the University of the Western Cape have agreed to cooperate in conducting multi-disciplinary research on productivity and decent work. The research outcomes should be supportive of (i) inclusive and sustainable economic growth based on productivity and (ii) sustainable and competitive enterprises which create productive and decent jobs particularly among youth and other vulnerable groups on a significant scale, based on innovative and appropriate Active Labour Market Programs and Labour Market regulation.
2. Productivity SA’s mandate is to promote employment growth and productivity, thereby contributing to South Africa's socio-economic development and competitiveness. The mandate of University of Western Cape (UWC) is to contribute to the advancement of knowledge and scholarship in response to the needs of a society in transition and in keeping with international standards of academic quality. A central purpose of the cooperation is to identify much-needed and, arguably, long-overdue measures for overcoming widely acknowledged and deeply rooted problems in society and the economy, which are described in more detail below.
3. Establishment of the partnership took place against a backdrop of the COVID-19 pandemic which has demonstrated its devastating impact on workers, small, medium and micro-enterprises (SMMEs) and millions of South Africans without quality work, as well as the unemployed. While we are faced with a potentially catastrophic health crisis, this cannot be a short-term programme since the issues are complex and outcomes will need to be evaluated to determine further priorities. 
4. In particular, reconstruction after COVID-19 can provide an opportunity for  South Africa to build on new foundations, to accelerate the adoption of new and appropriate technologies and to  restructure the labour market with a view to the creation of more decent and productive work opportunities. The planned research is intended to contribute to this process.
5. Unemployment, inequality and poverty are critical challenges in South Africa. The labour market is characterised by (i) high levels of unemployment especially among youth (ii) an abundance of low- and semi-skilled labour (iv) dualism between high-productivity, high-wage modern sectors and low-productivity subsistence sectors (v) casualisation resulting in an increasingly unregulated and insecure labour force (vi) gender inequality (vii) an insufficiently responsive labour market regime (viii) a decent work deficit in the informal economy in terms of low pay, low productivity, income insecurity and lack of social protection, of rights at work, of social dialogue and opportunity for advancement (ix) a need to develop the potential of SMMEs as a source of job creation and economic growth. South Africa’s labour market institutions and regulatory environment will need to address these challenges in a systematic way in order to promote decent work on a  significant scale while also improving productivity and competitiveness.
6. Key pillars of decent work include (i) the extent to which a country’s population is employed (ii) adequate earnings (a minimum living wage) and productive work (iii) job security (iv) adequate social protection against a variety of contingencies and vulnerabilities (iv) social dialogue between government, employers and labour aimed at securing equitable participation of all those who need jobs  in decent and productive work
7. The partners recognise that the research programme should identify and prepare conditions for engagement with all relevant players in the public and private sectors (including government, business, labour, NGOs, community organisations and others with an interest in the development of SMMEs, productivity and decent work opportunities). This ecosystem will include research institutions and experts required for specialised aspects of the research. 
8. Both institutions will identify possible sources of funding and steps to be taken towards accessing them. 

1. KEY PREMISES 

1. Achieving sustainable productivity and growth is linked to creating decent work as opposed to oppressive and demoralising work. 
2. The importance of SMMEs lies in their potential to develop into engines of creating decent and productive work opportunities to the extent that large-scale enterprise is not performing this role. 
3. Given the enormity of South Africa’s unemployment problem, SMME development cannot be limited to privately-owned businesses but should extend to productive enterprise in every sustainable form. 
4. Social need will be one of the guiding criteria in determining research priorities and partners in the ecosystem, as well as for mobilising community participation.
5. The enormous need for jobs among youth is seen as part of the solution: work creation and innovation should target youth in particular, turning their energy, creativity and desire for self-improvement into a driving force for the development of productive enterprise more generally.
6. The programme must be aimed at producing practical, implementable recommendations.

1. NATURE AND FOCUS

1. The programme will enable Productivity SA and UWC to combine their expertise in adding value to efforts to create decent employment, enhance productivity and grow the economy post-Covid-19 by establishing a collaborative platform for multidisciplinary research. The research will focus on the creation of decent work (productive enterprise) encompassing all activities creating value and income in addition to conventional job creation. Social need and community participation, amongst others, will be guiding criteria in determining research priorities and partners. 
2. The programme will be split into (consist of) dedicated, interrelated projects to deal with its research topics across different disciplines. Each project will include an analysis of what has been done in the past, what has worked and why measures taken to address certain problems have been unsuccessful. 
3. The programme will consist of applied research. It will be a phased programme producing interim recommendations for implementation and assessment within different sectors of the economy. All projects will take into account the relevant Sectoral Master Plans (SMPs) with a view to harmonising and promoting common policy objectives with specific reference to SMMEs.

1. RESEARCH THEMES

1. The following initial themes have been identified. However, this does not exhaust the available research topics. Other areas will be explored as agreed by the parties.

   1. Productivity and decent work in SMMEs

The focus of this theme is on productivity, competitiveness and best practices in the era of innovation and rapid change, linked to strengthening SMMEs’ business efficiency, economic performance and readiness to adopt value-adding technologies. The special importance of SMMEs lies in their potential as engines of creating work opportunities to the extent that large-scale enterprise is not fulfilling this role. If SMMEs are to fulfil their potential, there is a need for promotion of quality work and productivity. Therefore, the focus of the research is to ensure SMME optimisation and efficiency. Given the enormity of South Africa’s unemployment problem, SMME development cannot be limited to privately-owned businesses but must extend to productive enterprise in every sustainable form. The research will also explore how norms, institutions and social dialogue can shape an effective governance framework to support the creation of decent work opportunities in the SMME sector. To be of practical value to SMMEs and other forms of business activity, the programme will focus on applied research leading to practical recommendations rather than general conclusions. 

15.2 Promoting decent work and productivity in the informal economy

Industrial policies, as well as other government policies, reforms, and incentives to support private sector development (e.g. innovation, SMME development and labour market policies) are mainly targeted at formal firms, yet the share of these firms across different sectors is uneven. High levels of unemployment and a weakened economy have given rise to a growing informal economy and a concomitant growth of unacceptable working conditions and exploitation. Rights at work embodied in the Constitution and legislation have not filtered down to the informal economy. Social dialogue and organisational structures have not represented the interest of the informal economy adequately. Until these issues are addressed it remains unlikely that decent work imperatives will be attainable. Thus, the focus of this research theme is to find practical ways to stimulate transformation, promote decent work and increase productivity in the informal economy.

15.3 Youth unemployment 

Youth unemployment levels remain a massive concern in South Africa with 40.1% of the youth being neither in employment, education nor training. Social protection is inadequate and does not provide adequate coverage to the majority of unemployed youth. Job creation initiatives have been undermined by developments on a global scale – most recently by South Africa’s downgrading by rating agencies – and ambitious government targets have thus far not been met. The research will focus on the drivers of youth unemployment and reasons for the limited success of job creation initiatives. Based on this, it will propose sustainable initiatives based on social need as an integral part of its overall recommendations. Within this context it will target youth, not only to reduce youth unemployment but to harness their energy and desire for self-improvement as a driving force for the creation of decent and productive work in every sector.

15.4 Labour market segmentation, Labour Activation Programmes and transformative labour regulation

High levels of unemployment in South Africa have generated an expansion of the informal economy and an informal labour market characterised by gross decent work deficits. This includes low productivity, low wages, unstable employment and little opportunity for advancement. There is no existing policy to address working conditions in the informal labour market. This theme will focus on how decent work and productivity can be extended to the informal economy. Transformative regulatory measures and standards for fostering equity and inclusiveness will be explored. Research teams will engage with development partners (labour, business, government, civil society) with a view to developing the widespread consensus on the importance of job creation and decent work into a practical policy framework or social contract. Proposals will be directed at all levels (national, sectoral and enterprise) in a coherent way to make them mutually supportive.

1. METHODOLOGY

1. The programme will apply proven and contemporary research methodologies, both qualitative and quantitative.  It will engage in primary as well as secondary research that will span empirical research, applied research and documentary review.

1. IMPLEMENTATION 

1. The Productivity SA/UWC cooperation will result, in the first instance, in a joint research proposal based on the above research themes. The proposal  will  map out an integrated plan of action as a framework for the substantive research projects, including:
   1. potential points of engagement around each theme with SMPs and other programmes, as well as with government, business, labour and civil society;
   2. anticipated outcomes, including the parameters of recommendations for work creation, decent work and productivity;
   3. the breakdown of the programme into research projects, the focus of each project and interrelationships between the different projects;
   4. the necessary human resources, in particular the research expertise required to conduct the various projects.
2. The sourcing and/or continuation of research funding will be linked to achieving interim research outcomes. The evaluation process will serve to establish the basis and direction of ongoing research."